Four fundamentals for positive word-of-mouth marketing

1. Know what you’re about

Before other people start recommending and referring your business to friends and family, you need to have a good handle on the identity of your business and how it relates to its customers.

Being all things to all people is a trap many businesses fall into, especially in their early days as they try to establish a position in the marketplace.

This is understandable to a degree, because when your business is starting, you’ll more than likely be trying to drum up as much revenue as possible. This means your offering might not be as defined as it could be, and subsequently, your identity may come across as fluid or wishy-washy to customers.

You have to be something to someone. When businesses send a mixed message about themselves to consumers, it makes it hard for those consumers to recommend the business to others unequivocally.

For example, if your identity is striving for ‘cheap and cheerful’ but you’re also providing some premium services at a high price, consumers are left wondering what your business is exactly about.

Imagine you’ve got a car yard full of Hyundais, but you’ve also got a little corner for Rolls-Royces, which is quirky but also a little off-message. It creates cognitive dissonance for the consumer that makes them less likely to say to a friend: ‘Go to XYZ for a great deal on a good cheap car.’

The more likely word-of-mouth referral will be along the lines of ‘XYZ has some decent cheap cars, but they’ve got this Rolls-Royce section out the back, which is kind of weird. Not sure what that’s about.’

People generally want to know you do one thing well. They need to know what you stand for. They want to rely on you for that.

There’s a certain distrust of businesses that offer hybrid or multiple divergent products and services that can’t be easily made coherent for consumers through a brand narrative. Unless you’re a massive multinational, enabling people to believe you have the resources to do many things well, you should strive to find your one thing early on.

Find what you’re about and communicate that in all that you do, especially to your customers.

2. Do the right thing by your customers

And they will do right by you. Or at least that’s the theory.

The word-of-mouth chain is based on trust. There needs to be trust between your business and your customer before that customer will refer you to someone else. Then there needs to be trust between the customer and the person to whom they are recommending the business.

Word-of-mouth referrals can easily trip over the second link in the chain, not because of your business, but because the person doing the referring, spreading your word-of-mouth marketing, has little credibility or pull with the third party.

As a business, you have the most control over the first link in the chain (and some over the second, but more on that later). You can work your arse off to make sure your customer trusts what you do and the services or goods you provide. That bit is in your hands.

This relationship of trust is also built on the brand identity you have created: ‘No one else knows [X product category] like this business does.’ And further reinforced by the social proof that goes along with your business reputation: ‘It’s not just me who says this business is great, hundreds of others vouch for them too.’

Consistently living up to what your brand says it does inspires the trust and confidence in a customer to then refer you to someone else. You also need to consistently uphold your end of the trust bargain with others too, because that provides the underlying social proof for the referral.

3. Give them a chance to spread the word

Social media pages and customer testimonials are the easiest avenues to enable people to spread the word online about your business. You can also ask people to leave reviews on consumer review sites like Yelp too.

However, to connect with your customers and strengthen the sense of community around your business, start looking at in-real-life events as a way of building trust and creating stronger bonds. Face-to-face relationships yield incredible levels of trust and go a long way to making people feel like they are part of something special. Make them feel special.

Doing this might involve some extra work and financial layout for you, but the result regarding word-of-mouth marketing can be phenomenal. Think about it this way: when people buy from you, they engage in a (theoretically) even transaction. You give them something, they compensate you in return. Essentially, there’s no real reason they should go beyond that and start singing the praises of your business to all and sundry. You need to give them something to get something in return.

Sure, your goods and services should have them raving to their friends. Some might. However, go beyond that and give them something more. It might be a meet-and-greet, a workshop, a seminar or just an old-fashioned try-and-buy preview of a new product. Give people the nudge to become an advocate for your business by giving them that little bit more.

Find the right people, the ones who will go on to become your greatest advocates, and reward them.

4. Find your most effective advocates

This is the next step in the word-of-mouth marketing process that so many businesses don’t do: find your advocates. Even better, find the most effective ones.

As a business, you have the most control over the first link in the word-of-mouth chain, which is the relationship of trust between you and the customer. Sure, there are always elements that come into play over which you have minimal control: your outsourced delivery provider cocks up and you’re left to wear the reputational cost; your point-of-sale system has software problems that have wreaked havoc with your inventory; or, new legislation requires you put another bureaucratic hurdle in the way of your customers.

The list goes on. But mainly it’s up to you to ensure you have earned and kept the trust of your customer.

However, it is possible to drill down and find the customers most likely to recommend you to friends and ignite your word-of-mouth strategy. These are the people who are your valued customers, the ones who keep coming back, and you often have a relationship with already.

Furthermore though, the most effective of these customers concerning spreading word-of-mouth will display certain characteristics. They will be well connected across varied networks both online and offline. They will have credibility with their friends, family and broader connections. They will also display a willingness to share their opinions, not flippantly on all topics, but judiciously on ones on which they are knowledgeable or passionate. They will be effective opinion leaders.

These people are word-of-mouth marketing gold. Find advocates like this for your business, treat them well, and watch your word-of-mouth grow.

Fi Bendall is chief executive of The Female Social Network and a Westpac-AFR 2015 100 Women of Influence, who was described by CEO Magazine as "The CEO's secret weapon". An expert and pioneer in digital strategy, she has over 23 years’ experience in the digital and tech sectors.

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